Twitter plans to lay off as much as 336 people, or 8 percent of its staff, as part of an internal restructuring plan, according to a filing submitted with the Securities and Exchange Commission Tuesday morning.
The move, which was first reported by Re/code, is intended to help Twitter move more quickly internally.
“Product and Engineering are going to make the most significant structural changes to reflect our plan ahead,” CEO Jack Dorsey said in a letter Tuesday morning. “We feel strongly that Engineering will move much faster with a smaller and nimbler team, while remaining the biggest percentage of our workforce. And the rest of the organization will be streamlined in parallel.”
Many people close to Twitter have argued for years that the company has become too bloated, especially when it comes to engineering. This slows things down internally, and has created issues around accountability and ownership of certain products, sources say. Dorsey told Re/code back in June that Twitter needed to do a better job “clarifying ownership” over specific projects.
The layoffs will cost the company as much as $15 million, mostly in severance payouts. The company also used the opportunity to revise its earnings forecast upward for the third quarter. Twitter now expects revenue at the higher end of its earlier estimate, or about $560 million, with Ebitda profit closer to $115 million. Shares were up as much as 1.5 percent in early trading as a result.
Update: Dorsey wrote in his note this morning that Twitter would go through “great lengths” to ensure employees who are laid off will be taken care of. That seems to be the case, at least for some employees, according to sources. Twitter is offering people 60 days of pay, and will allow them to keep benefits through December, these sources say. The company is also paying out some percentage of vested stock in cash. A Twitter spokesperson declined to comment.
Here’s Dorsey’s full letter:
From: Jack Dorsey
To: All Employees
Date: October 13, 2015
Subject: A more focused Twitter
We are moving forward with a restructuring of our workforce so we can put our company on a stronger path to grow. Emails like this are usually riddled with corporate speak so I’m going to give it to you straight.
The team has been working around the clock to produce streamlined roadmap for Twitter, Vine, and Periscope and they are shaping up to be strong. The roadmap is focused on the experiences which will have the greatest impact. We launched the first of these experiences last week with Moments, a great beginning, and a bold peek into the future of how people will see what’s going on in the world.
The roadmap is also a plan to change how we work, and what we need to do that work. Product and Engineering are going to make the most significant structural changes to reflect our plan ahead. We feel strongly that Engineering will move much faster with a smaller and nimbler team, while remaining the biggest percentage of our workforce. And the rest of the organization will be streamlined in parallel.
So we have made an extremely tough decision: we plan to part ways with up to 336 people from across the company. We are doing this with the utmost respect for each and every person. Twitter will go to great lengths to take care of each individual by providing generous exit packages and help finding a new job.
Let’s take this time to express our gratitude to all of those who are leaving us. We will honor them by doing our best to serve all the people that use Twitter. We do so with a more purpose-built team, which we’ll continue to build strength into over time, as we are now enabled to reinvest in our most impactful priorities.
Thank you all for your trust and understanding here. This isn’t easy. But it is right. The world needs a strong Twitter, and this is another step to get there. As always, please reach out to me directly with any ideas or questions.
This article originally appeared on Recode.net.